Startup Guide To Finding Freelancers & How Much To Pay Them

Startups have many challenges, the biggest of them being lack of funds. That is why many new companies opt to hire freelancers until they can begin to build a team of their own. It’s a cost saving option in the beginning, requires less paperwork, and comes with a shorter on-boarding process.

However, anyone who has looked into hiring freelancers knows that the array of hourly rates can be daunting. With each individual setting their own rates, it can be tough to know if you’re hiring quality talent, or whether you’re paying too much or too little. If you pay too little, you may worry that you’re not going to receive quality work, and paying too much doesn’t work on a startup budget either.

Where To Find Freelancers

The two major names in freelancing were oDesk and Elance; now combined into one company called Upwork. These are solid choices because they’re populated with skilled freelancers from around the world, but it’s not all great news.

For example, Upwork has jobs being offered for as little as $2.50 an hour. These jobs are targeted at freelancers in developing markets, but they really undervalue the services and leave a lot of folks unable to compete. You can save yourself some money by hiring talent from developing countries, and while this may be a great option for many companies, there can also be hurdles to overcome. For starters, are you able to communicate effectively with people out of your region?

If you encounter a problem with your project and need the freelancer to do some more work, you could be left waiting a day or two to have the modifications delivered depending on the difference in time zones. Not to mention, there could be language barriers as well. These are all great discussion points to address in the interview or vetting process.

If you are willing to pay a little more, Authentic Jobs and Gun.io are great options for developers and Folyo is a good place to find freelance designers. You can find job boards for every area of expertise; all it takes is a quick Google search.

You may opt to find a freelancer in your local community if you prefer to meet face to face or work with someone that is in the same time zone as you. There’s a good chance you can find someone who can handle your job within a 50-mile radius. Meetup groups, business networking groups, entrepreneur support groups, and even chambers of commerce are all places you can find the best local talent or get referrals.

Meeting with your contractor personally also allows you to get a better feel for them and their work. The internet is a great resource, but most people still have trouble getting a good read on someone online.

Determining How Much To Pay

It can be very difficult determine what the right hourly freelancer rates should be for any given position. You can often be quoted between several hundred to several thousand dollars for the same job.

As a starting point, we can look at annual salary ranges for some of the common roles that early stage startups look for. Randstad, a staffing, recruitment and HR services company, provided salary information and what you can expect to pay based on the thousands of jobs they’ve helped facilitate:

Web Developers - $55,500 to $110,000

Social Media Managers - $49,000 to $90,000

SEO Specialist - $49,500 to $90,000

Graphic Designers - $32,000 to $75,000

We can take this one step further and look at what the equivalent hourly rates for these full-time positions would be:

Web Developers - $26.68 to $52.88

Social Media Managers - $23.56 to $43.27

SEO Specialist - $23.80 to $43.27

Graphic Designers - $15.38 to $36.06

One important factor to keep in mind is that freelancers typically charge a higher hourly rate than the hourly averages for salaried employees listed above. This is due to many reasons, including the fact that they are working on short term jobs and don't have the security of a full-time position, salary, and benefits; and of course, because they can set their own rates.

As a client, you may want to calculate the number of hours it should take to complete your job and then work out a fair flat rate, taking the freelancer’s hourly rate into consideration. In this case, it’s important to outline the number of revisions, edits, etc. that you want to include in the agreed upon flat rate. And be sure to agree on the deposit or pre-payment amounts, as well what the hourly rate will be in the event that the scope of work increases later on.

Choosing The Right Freelancer

Beyond interviewing potential candidates, checking references and reviewing portfolios, it's important to start out by assigning a small test job. This will ensure you’ll be happy with the quality of the freelancer's work, their work ethic, and that they will work well with your management style.

No matter what, you should never ask a freelancer to do any work for free and promise them more work in the future. This is not only disrespectful of their time, but in addition, samples of their previous work, along with the interview should be sufficient for you to decide whether or not you want to hire them for your project. If you can’t afford to test them with a project, or you aren’t feeling confident in their abilities through their references and portfolio, continue your search to find the right person.

I am the CEO of Studio 15, a socially responsible fashion brand. After leaving behind a 15-year career in the corporate fashion world, I started a company that focuses on doing good and supporting women.

It’s Studio 15’s mission to promote and collaborate with other fema...